2020 Ohio 4421
Ohio2020Background
- Put‑in‑Bay Ordinance §858.01 requires owners of vehicles made available for hire (including motorized golf carts) to pay an annual, nontransferable vehicle "license fee"; revenues are earmarked for local street repair.
- Mathys and Islander Inn rented motorized golf carts in the village and were criminally charged for failing to pay the fee.
- Trial court dismissed the charges, concluding the ordinance was preempted by state vehicle‑licensing statutes and thus unconstitutional; the Sixth District reversed.
- The Ohio Supreme Court accepted review to decide (1) whether the ordinance is preempted by state law (Article XVIII, §13/Home Rule) and (2) whether Article XII, §5a (restricting use of vehicle‑related fees) renders the ordinance unconstitutional.
- The Court held §858.01 is a municipal business excise on rental vehicles (not a state‑type vehicle‑operation license tax), is not expressly preempted by the General Assembly, and Article XII, §5a does not bar the ordinance; judgment of the court of appeals affirmed and case remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §858.01 is preempted by state vehicle‑licensing statutes (Home Rule / implied preemption) | Mathys: State statutes that impose a statewide vehicle license tax (and allow $5 local "piggyback" taxes) occupy the field; local additional vehicle taxes are implicitly preempted (Firestone). | Village: Cincinnati Bell controls — municipal taxing power is preempted only by an express act of the General Assembly; §858.01 is a business tax on vehicles for hire, not a tax on vehicle operation, and no statute expressly preempts it. | Held: Not preempted. §858.01 is a business excise on rental vehicles, distinct from state operation/license taxes, and no express statutory preemption exists; Firestone’s implied‑preemption rule is inapplicable post‑Cincinnati Bell. |
| Whether Article XII, §5a prohibits the ordinance (limit on use of vehicle‑related fees) | Mathys: §858.01 "relates to" operation/use of vehicles and collected funds are used locally, so §5a’s restrictions require a statute authorizing such expenditure — ordinance violates §5a. | Village: Garrett establishes §5a limits state‑imposed fees only; municipal fees/taxes are outside §5a. Even if §5a applied, §858.01 funds are used for street repair—an authorized highway purpose. | Held: §5a does not render §858.01 unconstitutional. Court accepts Garrett’s view that §5a limits state, not municipal, vehicle fees; alternatively, §858.01’s purpose (street repair) fits §5a’s permitted uses. |
Key Cases Cited
- Firestone v. Cambridge, 113 Ohio St. 57 (Ohio 1925) (earlier holding that a municipality could not impose an excise on vehicle operation when the state occupied the field)
- Cincinnati Bell Tel. Co. v. Cincinnati, 81 Ohio St.3d 599 (Ohio 1998) (municipal taxing authority may be preempted only by an express act of the General Assembly)
- Garrett v. Cincinnati, 166 Ohio St. 68 (Ohio 1956) (Article XII, §5a is a limitation on the use of state‑imposed fees and not applicable to municipal fees)
- Beaver Excavating Co. v. Testa, 134 Ohio St.3d 565 (Ohio 2012) (construing Article XII, §5a and the phrase "relating to" broadly for vehicle‑related revenues)
- Gesler v. Worthington Income Tax Bd. of Appeals, 138 Ohio St.3d 76 (Ohio 2013) (reaffirming Cincinnati Bell’s requirement of express statutory preemption)
- Saviers v. Smith, 101 Ohio St. 132 (Ohio 1920) (excise tax defined as a tax on the privilege of conducting a business activity)
- S.B. Carts, Inc. v. Put‑In‑Bay, 161 Ohio App.3d 691 (Ohio Ct. App. 2005) (trial‑court level determination that the ordinance operates as a tax for revenue generation)